ABU DHABI — The economies of the Persian Gulf oil producing states
were expected to shrink in 2009, a report said.
Banc of America Securities-Merrill Lynch said the economies of Kuwait,
Saudi Arabia and the United Arab Emirates would decline amid the sharp drop
in the price of oil and the global credit crisis.
The report said the gross
domestic product of these GCC states would drop by up to 1.8 percent in
2009.
"The credit crunch and deepening global recession in the fourth quarter
have brought about a sea change in the underlying emerging markets macro
story," Banc of America said.
The investment firm said all Gulf Cooperation Council economies with the exception of Kuwait
would post a budget deficit in 2009 should the price of oil average $45 per
barrel.
The report said Saudi Arabia's GDP would drop by 0.2 percent in
2009, followed by 0.6 percent in the UAE and 1.8 percent in Kuwait. The
economies, led by Saudi Arabia, were expected to rebound in 2010.